Roles and Responsibilities of the Nonprofit Board

Members of the board of directors are trustees who act on behalf of an organization's constituents, including service recipients, funders, members, the government and taxpayers. The basic responsibilities of the board of directors include, but are not limited to:

Determining the organization’s mission and purpose

Supporting and evaluating the chief executive with the goals of the organization in mind

Ensuring effective organizational planning

Determining which of the organization’s programs are consistent with its mission and monitoring the effectiveness of these programs

Securing adequate financial resources for the organization to fulfill its mission

Assisting in the development of the organization’s annual budget and ensuring that proper financial controls are in place

Defining prerequisites for potential new board members, orienting these new members, and periodically evaluating performance

Adhering to legal and ethical standards and norms

Clearly defining and articulating the organization’s mission, accomplishments and goals to gain support from the community and enhancing the organization’s public image

Overall, board members have a duty of loyalty to the organization, its staff and other board members. While differences of opinion will likely arise, board members should keep disagreements impersonal. By practicing discretion and accepting decisions made on a majority basis, the board can accomplish unity and confidence in its decisions.

The board of directors should be open to self evaluation and regularly review their own composition to ensure constituent representation, board expertise and commitment. Boards also are responsible for evaluating and determining compensation for the executive director. Board members perform their responsibilities through regular meetings and a committee structure that is appropriate for the size of the board and organization. Board members are responsible for arriving at meetings well-prepared and ready to engage in thoughtful dialogue.

Legal Responsibilities of the Board of Directors

The board is ultimately responsible for the performance of the organization in all areas of its work and should ensure that the organization is in compliance with state and federal law. The following checklist of tasks nonprofits are legally required to perform is neither intended nor to be construed as legal advice.

Organizations with more than $25,000 in financial activity should file IRS Form 990 with the IRS and the charities division of the Minnesota Attorney General's Office. Organizations with less than $25,000 in financial activity should file the 990-N e-postcard.

Complete an audit if the organization’s total revenue exceeds $750,000 in a year, and file the audit with the charities division of the State Attorney General's Office.

Report a change of name, address or amendments to the articles of incorporation to the Secretary of State and pay any necessary fees for changes.

Make the IRS Form 990 and Form 1023 available to the public.

Report any Unrelated Business Income to the State Department of Revenue and the IRS, and send tax payments with IRS Form 990T.

Withhold taxes from employees, and send withholding payments to the IRS and Minnesota Department of Revenue.